Everyone loves to talk about the painter who did some work for Facebook and took payment in the form of company stock, which was worth hundreds of millions 7 years later at the company’s IPO. Especially potential clients that are trying to negotiate engineering work in a similar manner. For many new consultants, no offer of equity would ever be enough for one reason: you can’t eat equity. New consultancies can’t be bothered with anything that doesn’t result in hard cash. ...

I design electronics for the money. Yes, I love the work, have gotten quite good at it, and believe it is my God-given purpose on this Earth. But I don't kid myself; if cash from electronics stops flowing I'm going to find another job. Businesses that can't recognize their primary motivator are destined to be a failure (note that it is possible to run a failure of a business for a long, long time). Making sure I get paid is arguably the single most important aspect of the business. What, ...

Money used to be such a simple thing. A $1 weekly allowance from parents for all of your childhood chores was a pretty easy account to keep track of. Want to know how much you have? Open the piggy bank and count it up. Once the money was inhand it was 100% yours. As time pressed on, and if you lived in the U.S. you were introduced to the IRS (or similar tax collecting agency elsewhere). These folks want to know everything about your money so they can get their cut. Not only that, they ex ...

Right now everyone who reads this article in the United States owns a business. It may only exist in potential form, but it exists. Say someone walks up to you on the street with a 555 timer and a wad of cash. He pays you to make an astable oscillator on the spot. Congratulations! You, Mr. Business Owner, now have business income. And if you still need convincing, the IRS will happily remind you that you are a business owner by requiring you to pay 15.3 percent in social insurance taxes instead ...

There are a lot of consultants out there who like to think of themselves as great businessmen and women. They focus in on the contract and make sure their contingencies are covered so they will get paid even if lawyers are needed. Sadly, most off those engineers are fooling themselves and are not good at business. I take a different approach: I'm a poor businessman. I don't particularly like working with lawyers, and I would probably prefer to walk away from a client and pick up other business t ...

Looking from the view of a packed office, it may seem that having a private consulting business with a private lab would be paradise. Nobody to walk up and bother you when under the gun. Nobody to use the communal toaster oven to heat up stinky leftover fish. Nobody to steal equipment from your bench without so much as a note. But once out of the office, the negatives which were recently so keenly understood fade as the positives start to be missed. When working solo, there’s nobod ...

Anyone in a professional field feels that their station is deserving of a vacation or two each year. Even new hires at most companies are allocated a week off. However, this conviction begins to wane when working with non-salaried positions. Thanks to the fee-for-service arrangement, consultants, Doctors, and Dentists are expected to always be available when needed . Of course all Doctors, Dentists, and consultants take vacations like everyone else to maintain a decent work-life balance. ...

If I had to pick one root cause for all of mankind’s problems, it would be errors in perception. Measuring, assessing, and gathering data is well within our ability. However selecting what should be measured and interpreting the data to drive higher-level thinking is arguably our current evolutionary challenge. Just look at how sharply educated people can be fragmented by politicians, marketers, and the media on any issue. Being both the boss and employee of a consulting business d ...

At first blush, consulting seems like a ‘work-for-money’ trade. But clients don’t care about the work; they are only interested in the work product. The design, service, or patent that makes up the intellectual property (IP) resulting from an engineer’s work is ultimately the only thing of value. Because the agreement is really an ‘IP-for-money’ trade, a good consulting agreement should broach the topic of who owns the IP that is generated during the course of ...

Early in my consultancy, I was eager to please. First clients aren't easy to find! But this particular client was working on a new microcontroller implementation of an existing product. It started as a simple way to control the system, but as opportunities for project improvements came up everything became something that should be added. Some of the extra features were: The ability to log system diagnostic data The ability to log user input data The ability to support USB communication to get ...

One of the best things about being a consultant is being able to manage projects without having to manage people. Hiring employees to help complete a project can entail adding burdensome tasks as well as much more risk. At the same time, passing on possible work because there is a section of work that you can't complete makes the sales process much more difficult. I've been able to get great jobs thanks to a functional subcontracting arrangement, but as I'm about to detail, I've also been burned ...

Congrats! Someone thinks enough of you and the work to ask how much your services cost. The natural engineering approach would be to quickly quote them an hourly rate that you have already defined as what you need in order to make a living. That's not a bad approach, especially since it is so simple for everyone to understand. However the use of your time is not the only variable in play, and it is best to consider a few more aspects when writing a quote. It's important to bear a few thi ...

When my consulting calendar was busy enough that I not only could say 'no' to a potential client, but I had to say no to a client, I felt like I had 'made it' as a consultant. The hardest part of my biggest challenge, initial sales, was behind me. The surge of client interest was so intoxicating that I foolishly thought that I'd never have to work at sales again. This was the first of many 'peaks' in the business, the euphoria of which was quickly followed by a sobering lull in business where ...

The past articles in this series have been largely about making sales, which is the most important aspect of any business. There comes a point, however, where there is enough potential work and the consultant needs to manage the limited amount of time that exists. To help define the stages of a consulting firm that reaches this point, we will define 'Young', 'Growing', and 'Mature' companies: Young An engineering consultant that is just getting started won't have many (or any) clients, a ...

The best way to approach any consulting job is trying to work yourself out of it by providing a great solution. The worst consultants, ironically, can make a remarkable amount of money in the short term by becoming entrenched in a project yet never delivering. Having a 'trophy shelf' of completed projects is any consultant's pride portfolio, even if NDAs and contracts prevent them from showing it off. But what about amazing jobs? When a consultant has a client that pays a fair rate, make ...